Intelligence

Exclusive to IIICorp: Japanese firm IBIDEN Co Ltd shows interest in BHEL’s emissions contract

ibidenTokyo-based IBIDEN Co Ltd is among several companies, including Chinese firms, that have submitted their expressions of interest (EOI) to state-owned Bharat Heavy Electricals Limited (BHEL) for a proposal to design and engineer the latter’s emission control systems for power plants and its integration with the boilers on a project-to-project basis. A BHEL official also told IIICORP that the EOI is applicable to all BHEL power plants across the country. According to its website, the power major has 20,000 MW installed capacity and going by IIICORP metrics, the contract could be worth upwards of USD 400m. The EOI comes in the wake of recent emission norms laid down by the Indian Ministry of Environment, Forests and Climate Change (MoEFCC).

IBIDEN Porzellanfabrik Frauenthal GmbH, a subsidiary firm majority owned by IBIDEN Co Ltd, manufactures the CERAM brand of catalyst and industrial honeycombs at its facility in Frauental, Austria. CERAM has developed into a global supplier of catalysts and industrial ceramics and currently has customers in more than 40 countries with over 400 employees. In the course of its international expansion, the company has set up subsidiaries in the United States and South Korea. The introduction of progressive environmental legislation around the world is a key driver of the CERAM´s business activities, says its website. The company’s environmental management system ensures responsible use of natural resources and systematically reduce its wastewater, solid waste streams, and atmospheric emissions.

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Featured Story of the Week: SGCC bid for Abengoa’s Brazilian assets faces delays arising from deal’s complex, politically-sensitive nature

State Grid Corporation of China’s (SGCC) planned purchase of Abengoa SA’s Brazilian power transmission operations is facing ongoing delays as a result of the high level of complexity it has encountered in the asset evaluation process. That’s according to Xiao Bin (肖斌), an official at theState Grid Brazil Holding SA (国家电网巴西控股公司), the local subsidiary of SGCC, who made reference to the highly diverse nature of the assets in question and their complicated financial position.

“The acquisition is still in talks and there is n0_1_21st_Century_Silk_Road_Map_thumb_1460933781855o certain time for how long it will take,” Xiao said. He added that a formal proposal has yet to be made.

SGCC’s confusion is shared by industry analysts who have also had difficulty estimating the value of Abengoa’s Brazilian assets, which comprises facilities that are operational and reneue-generating as well as ones that are being developed. In the latter category, Abengoa has about 6,000km of transmission lines under construction that will require the purchaser to take on billions of dollars of future investments.

The Brazilian government has indicated that it would expect a large and well-capitalized entity like SGCC to acquire all of Abengoa’s Brazilian assets as a package.

This news service previously reported, citing a SGCC source, that this transaction was a politically sensitive one and that it should not be viewed as a simple sale and purchase agreement between two companies. The state-owned Chinese company, which has invested USD 2.58bn (CNY 16.83bn) in Brazil’s power transmission sector since 2010, believes that the expertise it has developed via the construction of China’s vast ultra-high-voltage projects over the past two years gave it a competitive advantage over rival bidders.

Financially-distressed Abengoa, which filed for bankruptcy protection in November 2015, is Brazil’s largest non-state owned power transmission operator. Its Brazilian operations have total net debts of USD 825m (CNY 5.4bn), of which more than USD 218m (CNY ) are owed to local equipment suppliers in the country, according to the electricity industry association Abinee.

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